In brief
- Litecoin founder Charlie Lee has blasted the DeFi ecosystem.
- His tweets come after a major DeFi exploit.
- His comments created plenty of discussion.
Litecoin founder Charlie Lee has criticized the decentralized finance (DeFi) industry, calling it the “worst of both worlds.” His critique comes after a trader exploited several DeFi protocols to take home a staggering $1 million—in just two trades.
As Decrypt reported, the trader used a clever set of instructions—all executed in one big transaction—to exploit the existing DeFi ecosystem. And then did it again.
After the operation, bZx, which maintains the Fulcrum protocol, posted an update stating that it will use an “admin key” to remedy the situation—exposing that the supposedly decentralized protocol isn’t decentralized at all.
Charlie Lee echoed this exact concern. He said that, if most DeFi can be shut down by a centralized party, then it’s just “decentralization theatre.” At the same time, he noted that undoing a hack or exploit always requires centralization, making DeFi no better “than what we have now.”
But his comments were controversial. Several users pointed out that there are many different DeFi projects and he shouldn’t judge all of them by a few—or one, in this case—examples. Most commenters also acknowledged that DeFi is still a nascent technology experiencing its growing pains. But at the end of the day, with $1 billion on the line—DeFi must do better.
